Without CCS, is coal facing ‘valley of death’?
More evidence today about the troubles the coal industry faces — and about a decline that seems inevitable if a way isn’t found to capture and store carbon dioxide emissions on a widespread scale.
The headline on Anne C. Mulkern’s piece for Greenwire (via The NY Times) says it all: “Coal industry sees life or death in Senate climate debate.”
Coal Tattoo readers know that the United Mine Workers union (an organization that is unfortunately ignored by much of the media covering the climate debate — leaving only coal operators and their lobbyists and the pro-coal voices) has said this about the House-passed version of the global warming legislation:
As it stands now, the amount of money dedicated to coal in this bill is remarkable, and the future of coal will be intact.
But the Greenwire story puts a finer point on it, explaining that the idea of an intact coal industry relies on scientists perfecting and the industry deploying CCS technology on a grand scale. The article quotes Kenneth Green, resident scholar at the conservative think tank American Enterprise Institute, saying:
Unless they come up with a breakthrough technology to capture carbon and store it, coal is dying.”
Green adds:
If this [bill] does what they want it to do, I would say coal is on its way out.
The article further notes that environmental groups think the bill is already to friendly to coal:
“They’re probably popping champagne corks and are partying all summer long because of what they got in the Waxman-Markey bill,” said Nick Berning with Friends of the Earth, an environmental group. “The idea that coal lobbyists are out there complaining that they need more is just appalling, because they already got so much.”
And, it outlines a list of things the coal lobbyists hope to do to the bill as it moves through the Senate:
Lobbyists are asking lawmakers to slow down the pace of any cap-and-trade system, using lower carbon caps that kick in more slowly. The House bill would reduce greenhouse gas emissions from 2005 levels by 17 percent by 2020, 42 percent by 2030, and 83 percent by 2050.
Coal advocates are not revealing what numbers they are willing to accept, only that the ones in the House bill are unrealistic for the industry.
“The most important reason to adjust the timeline is to give technology a chance to catch up,” said Scott Segal, co-head of the federal government relations and strategic communications practices at Bracewell & Giuliani LLP. The firm represents coal, utility and oil interests. Targets for carbon reductions, Segal said, “have to be respectful of what technology can accomplish.”
… In addition, coal is asking senators to add language specifying the highest price a pollution permit in the cap-and-trade system could reach. They tried unsuccessfully to have that language added in the House. Under the Waxman-Markey bill, the free market will determine the price for the permits that are auctioned.
And, the article outlines a bit of the National Mining Association’s lobbying strategy on the bill:
Lobbyists are talking with the “gang of 16″ senators. They include 10 Democrats who last fall signed a letter to Senate Majority Leader Harry Reid (D-Nev.) laying out concerns about a cap-and-trade plan. The letter, among its points, said that burden must be shared equally across states.
Signing the letter were Sens. Debbie Stabenow and Carl Levin of Michigan, John Rockefeller of West Virginia, Blanche Lincoln and Mark Pryor of Arkansas, Jim Webb of Virginia, Evan Bayh of Indiana, Claire McCaskill of Missouri, Sherrod Brown of Ohio and Ben Nelson of Nebraska.
In the weeks after the letter was sent, Democrats Jeff Bingaman of New Mexico, Byrd of West Virginia, Kent Conrad and Byron Dorgan of North Dakota, and Tim Johnson of South Dakota joined meetings on global warming policy. Interior Secretary Ken Salazar, who was a senator from Colorado until his appointment, was the 16th person in the group.
Lobbyists said there are a few other moderates they are targeting, including Democrat Mary Landrieu of Louisiana and Sen. Arlen Specter of Pennsylvania, who just switched from Republican to Democrat.
Finally, and perhaps most importantly, it again reinforces the size of the challenge facing coal country in trying to perfect CCS, which everyone seems to agree is the only way to save the mining industry:
The industry’s hope is that it can find a commercially viable way to capture carbon emissions and sequester them underground or underwater. But putting the pieces of that technology together and getting them running before the carbon cap tightens could be difficult.
“You’re talking about a minimum of 10 years” to show the feasibility of a carbon capture and sequestration plant, said Joel Darmstadter, senior fellow with Resources for the Future, a nonpartisan research group.
Such a time frame is “unbelievably fast when you don’t even have a pilot project,” Green said. And building pipelines needed to move the captured carbon, he said, is “virtually impossible” within that decade.
It is through that narrow window that the industry sees a potential valley of death.
Coal industry supports don’t want the public in the coalfields to even consider this “potential valley of death” as a possibility … but suppose just for the sake of argument that it is … then what’s the plan for coal communities and the people who live there? Anybody know?
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What was “the plan” for the high sulfur of the Illinois basin when phase I of the clean air act was enacted. Basically nothing and the coal mining in this area DIED as did the jobs and the livelihood of miners. There’s no plan for the “valley of death” from the cap & trade bill. Economics will rule, jobs will be lost and fixed-income folks will not be able to afford electricity. How’s those apples?
I like your last question Ken, because aside from current efforts being led by citizens and non-profits (and some small private businesses) to research the potential for and develop lasting alternatives to coal in the counties where few such opportunities currently exist, there is a deeper question to be asked here.
If the coal industry really cares about the communities, and if it really cares about the future economic viability of the sectors of West Virginia’s economy that are tied to coal, then what are the coal companies doing, or at least thinking about doing, in order to ensure that if coal does indeed face a sharp decline, that those communities and economic sectors don’t experience the same downfall? I wonder if the coal CEOs are considering the long-term ‘health’ of the rural economies and communities where the coal is produced?
In my estimate, they aren’t considering that at all. They talk alot about jobs and economic development and how coal is the only thing going, but as such a responsible, caring industry, shouldn’t they be thinking about how to re-invest in their workers and in the communities where those workers live, just in case the industry begins shrinking, for whatever reason? Shouldn’t they be putting money into developing a restorative economy, a renewable economy, and/or a locally beneficial economy that provides a diversity of jobs? Shouldn’t they be re-building all those schools that have closed down? Shouldn’t they be sharing their profits with the workers who have shared in the generation of those profits? Libraries?
So, for the sake of argument, is the coal industry thinking about West Virginians, or are they only thinking about their shareholders?
I challenge them to prove their dedication to West Virginia’s workers and economy by holding a forum entitled “The West Virginia Post-Coal Economic Development Forum.” This, I think, would at least be a step in the right direction.
The same can be asked/required of West Virginia’s elected leaders. Dear Joe Manchin, what is your plan for a southern West Virginia without coal? How will you help make up for the lost jobs and tax revenues (which I’d argue aren’t substantial, but they do exist)? Is Uncle Joe even thinking about this?
If the coal industry does indeed start (continue) to decline, and our elected officials fail to dedicate the rest of their careers to helping diversify the former “coalfield” economy, and if it ends up falling upon the hands and minds and pockets of the populace to pick up the pieces and clean up the water and fix up the land and re-build an economy with degraded infrastructure and resources, at that time there should be no more doubt, in anyone’s minds, that it was always….always….all for industry profits, that it was all for political gain, and that the voter/resident/worker/mother/father/daughter/son meant less than nothing in the eyes of those in power.
I guess we’ll have to wait and see what the truth is, though the majority already have a pretty good idea. Lets see that “Post-Coal” Forum happen, and let it be honest and sincere and dedicated and open. And let Joe Manchin and Gene Kitts host it, and let’s hear them admit that coal is running out, and that the industry is facing intense challenges, and that there needs to be a concerted effort to bring new economic opportunity to southern West Virginia and to all coal-producing counties in this state.
Let’s begin putting the pieces in place for an economic transition away from coal, or otherwise, lets impeach and drive out of town those who are preventing that transition from happening.
Lets all be on the same side for once. Who knows, it just may (provide) work.
In response to Casey, if you saw my posts on the Boucher climate blog, even just sticking with coal without any cap-and-trade or carbon sequestration would still result in a continuous increase in the price of coal, and therefore the price of most of our electricity. Add on cap-and-trade and CCS and that gets even worse.
I did see your comment on that blog about the decline in coal prices. They’re still higher than they were in 2005, and still almost double what they were in 2000 (see EIA Annual Coal Reports, www.eia.doe.gov — you have to sift through the historical reports yourself, but the information is there).
As of today, the price of Central Appalachian coal, after hitting bottom at $43.50/ton six weeks ago, rose to $50.05 (http://www.eia.doe.gov/cneaf/coal/page/coalnews/coalmar.html)
China is not going to stop demanding coal unfortunately (though they are developing renewables pretty aggressively), neither is India (but they have some of their own like China does), and we don’t export that much coal to them anyway. Most of the coal exported from WV is for metallurgical purposes, not for electricity, and foreign exports account for less than 15% of the state’s coal production. Meaning that less than 15% of the rising price of WV coal can be contributed to foreign demand.
The real impact on price increases to $140 per ton last year was due to speculation. Guess what investors are going to be speculating now? That coal is going to cost more with cap-and-trade. This relates to the “Defining Challenge” post above.
If coal is going to cost more, and the technology is not in place to provide the credits for sequestering the CO2 from that coal (thus softening the impact of the higher prices), then what is going to happen to demand?
My thought is that carbon credits for renewables will not be able to keep pace with coal burning, and CCS won’t be in place fast enough to keep coal afloat, so over time, demand will drop significantly over the next 20 years, while the thickest coal reserves will still be mined out (as they will serve as the produced resources while the more expensive mines will close), and the coal economy will be in severe decline by 2030. Knowing what might happen to prices is tricky because the drop in demand may reduce prices, but the imposition of a price on carbon combined with declining coal reserves will drive prices up. Either way, without CCS in place, coal is going to have a tough time.
So echoing Challenge’s call above, how about a discussion on alternatives to coal? The rational leader would look at our current situation and explore all available options. The irrational or uncaring leader would explore merely a single option, and that would likely be the one most comfortable for political purposes.
Well, our leaders have been exploring one option for the coal-producing counties — push for mountaintop removal and CCS and coal-to-liquids and huge coal subsidies, “we have to save coal!!” Now, will those same leaders take the rational route and explore the situation where they are unable to save coal?
As Willie Wonka sings: “There’s no earthly way of knowing / Which direction we are going / There’s no knowing where we’re rowing / Or which way the river’s flowing / Is it raining? / Is it snowing? / Is a hurricane a-blowing?/
[apprehensive, now spoken]
Willy Wonka: Not a speck of light is showing / So the danger must be growing / Are the fires of hell a-glowing? / Is the grisly reaper mowing? / Yes! The danger must be growing /
[yelling]
Willy Wonka: For the rowers keep on rowing / And they’re certainly not showing / Any signs that they are slowing!
[screams]
Lets hope the rowers take it back a notch and re-consider the direction they’re taking us.
The larger missed point is whether CCS becomes commercially viable or not, in the meantime there is very little being done to de-carbonize the grid, waiting for it to happen. Coal might be dying, but it will take many down with it.
What will happen to Appalachian communities, Ken?
What will happen will be the same thing that has ALWAYS happened at the “bust” end of coal’s natural boom-and-bust cycles. The coal companies will clean out their own coffers, go belly-up, leave Appalachia in a toxic mess and walk away with no remorse and no responsibilities.
I see no reason to suspect it will be otherwise this time. The only difference is that this time, perhaps, by virtue of the finite nature of the supply of coal, they’ll be gone for good and we can finally start looking for real economic solutions.
There’s no doubt that day will be ugly and painful, Ken, but there’s also no doubt that WV apparently wants it that way, since we, via our actions in the voting booth, keep putting people into positions of power and responsibility who persist in setting us up for that terrible fall.
Sorry to be a pessimist, but it is, after all, a learned response.
We don’t have the infrastructure, the landscape, the business climate or the education base to move to this mythical ‘new economy’. Nor do I see a true desire from the population (or the politicians) to change any of the above.
There will be no joy in Mudville after coal is gone. Your pipe dreams of an improved and diverse economy are more far-fetched than those who hope to capture carbon.
Old Gray, first of all, I like the name. Second of all, your comments to me seem to be reflective of the ‘learned response’ that Bob Kincaid talks about. Are we not survivors? Do we not have the courage and creativity to create a new economy? Or are we a little kid that cowers to the corner and sucks his thumb because we didn’t know how to deal with a difficult situation?
This might sound idealistic, but I’d rather be someone who picks up a shovel rather than someone who runs away crying. Lets not resign ourselves to fatalism, the future isn’t as clear and dark as you seem want to make it.
I have little faith in my community. That is a learned response
A.D.Challenge,
So if I hear you correctly, you want private companies (coal companies in particular) deciding and controlling the future of communities. To me that it corporate fascism and scares me more than federal government socialism. I think the role of private enterprise is clear in our Republic and your ideas are dangerous.
Anonymouse,
Yes I read your posts & links and agree with a lot of your analysis. Coal will become more expensive (without more productive seams and/or equipment/methods) assuming the economy grows. It is a mature industry and the newer green growth industries will become more cost competitive (even w/o gov’t meddling). I like letting market economics decide the winners. We absolutely need reliable base load power.
Jack and Jill went up the hill to fetch some wind power electricity
The wind didn’t blow so power they did not tow
And the economy came tumbling after.
Market economics dont exist as long as subsidies are handed out like candy and the true cost of economic activity is not included in the price of our goods and services. So you can shed that veil.
Secondly, it is not corporate fascism that I’m proposing, it’s reinvestment, giving back to the communities that you’ve taken from so long, using your influence and capital to effect positive change rather than ecological and cultural genocide. Saying, thanks for the good times, here’s some schools and training programs and some land and seed money to get you started, and we’ll even hire the teachers and trainers for 10 years.
So I dont know where you got that I was proposing corporate fascism. Or perhaps that was your attempt at undermining - with a mere one-sentence long scare tactic (”He’s a communist!! They’re taking your jobs!! Homeland Security!! Your ideas are dangerous!! Tomatoes are poisonous!!) - the implications of my post and the real underlying message, that coal companies and our political leaders have done nothing to help the coalfields, and are doing nothing to ensure that there is economic opportunity in a post-coal future. My personal hope is that the 80% of the land and natural resources in this state be put back in the hands of the public — therefore, not in the hands of private interests.
Somewhere you got confused in what I thought was my very clear and concise post.
Nice try though.
How about this version?
“Don and Joe tore down the hill to mine the thinner coal (b/c there wasn’t any thick stuff left)
But that’s all that remained and so they left and the people were more poor than before.”
Oh man! You’re good Casey, I can’t believe I didn’t cherry pick this one the first time, and I’ll re-post it here:
“So if I hear you correctly, you want private companies (coal companies in particular) deciding and controlling the future of communities. To me that it corporate fascism and scares me more than federal government socialism. I think the role of private enterprise is clear in our Republic and your ideas are dangerous.”
That’s like having chocolate all over your face and telling Mom that I was the one who ate all the chocolate chips. Has the coal industry not enjoyed a state of corporate fascism ever since the late 1800s?? It was a less-than-brilliant stroke of the key there to suggest that my proposals to re-invest some of the extracted wealth/profits back into the areas that were negatively impacted from over a century of corporate fascist coal dominance….was itself a proposal to develop a state of corporate fascism.
Empowering and benefiting the public (my proposal) vs. extracting more coal and letting the out-of-state coal companies keep all of their huge profits out-of-state while leaving the communities to bear the social, economic and environmental costs of a dependence on a coal economy (your apparent proposal)….
I leave this to the readers, which proposal supports corporate fascism??
You’d make alot of money working for Bill Raney or Steve Walker. You should do that, I hear they’re on the winning side these days.
Anonymouse, I believe Casey was directing his corporate fascism comments at A.D. Challenge, not you.
My response to A.D. is that I can’t think of ANY industry that has voluntarily put effort into community development on their way out of business, and it’s unrealistic to expect the coal industry to take it upon themselves to do that.
But it’s entirely realistic to expect our elected leaders to do exactly that.
The potential devastating impact of carbon constraints on coal communities is one of the reasons that a straight carbon tax might well be a better strategy than cap and trade, because then the tax revenues could be applied to economic re-development efforts in areas hit the hardest by such a tax.
A few years ago I attended a presentation by a D.C. think tank on the potential national economic impacts of implementing a carbon tax aimed at achieving Kyoto targets. I’m sorry, but I can’t provide any links as I don’t recall the particular study name nor the name of the think tank, but the broad strokes are etched in my memory.
The conclusion of the study was that the net economic impact on the U.S. of aggressively implementing carbon constraints through a carbon tax would be very slightly positive, close enough to the margin of error to be effectively net zero.
BUT the distribution of impacts would be distinctly unequal, with the greatest negative impacts in areas like the WV coalfields. The authors of the study proposed that the proceeds of such a tax be used anywhere four miners or more were laid off to continue to pay them full time wages and benefits AND pay for any tuition and training fees in the area of their choosing for four years after they were laid off. The costs of doing so were included in their ‘net zero’ calculations for overall national economic impact.
Simply subsidizing retraining and providing what amounts to a very generous unemployment compensation package to unemployed miners won’t be enough to revitalize hard hit coal communities, but it sure would help.
Meanwhile, we could and should require mining operations to work with local communities to decide which potential post mine land use strategy would best serve the community after the mine is closed.
We should create incentives for mine operations and preparation facilities to implement environmental management systems that go above and beyond air and water pollution standards and include continual improvement practices to minimize negative environmental impacts.
And we should certainly pursue any other economic development efforts that might benefit the region.
limiting our strategies to delaying the inevitable demise of the coal industry in WV clearly just drives a wedge between those who share an interest in assuring as high of a quality of life for our residents but diverge on coal and climate related issues.
We should be building on our shared values, not devoting valuable human energy to enhancing confrontation.
OK, guys — enough with the “fascism” remarks. That’s silly name-calling and beneath you both.
Nice reference to Wonka, though, and also a nice poem from Casey.
Ken.
Mr Bassage,
Thanks for clarifying my post and I agree with your economic development thoughts and where this responsibility lies. Improving the coalfield socioeconomic situation is important whether coal is in the future or not in the future. Infrastructure is key to improvement and roads are required. The terrain of the coal fields makes for very expensive infrastructure construction. Mining has helped to reduce this cost to taxpayers and should be continued to be pursued, understanding that just because it’s built does not mean “they” will come. Forbes magazine has rated WV as the worst state to do business in. Maybe when when this is improved, so will the state and its citizens.
Casey
Anonymouse,
Re: “My personal hope is that the 80% of the land and natural resources in this state be put back in the hands of the public — therefore, not in the hands of private interests.”
Why not make it a 100% and to heck with individual rights? For the benefit of “The People”, right? I can think of several countries that have done that but I won’t label that type of political system or name the historical leaders that espouse it.
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